The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Healthpeak Properties, Inc. (NYSE:PEAK) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Healthpeak Properties, Inc. (NYSE:PEAK) investors should pay attention to a decrease in support from the world's most elite money managers in recent months. Healthpeak Properties, Inc. (NYSE:PEAK) was in 23 hedge funds' portfolios at the end of June. The all time high for this statistics is 29. Our calculations also showed that PEAK isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 56 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Ken Griffin of Citadel Investment Group
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost precious metals prices. So, we are checking out this lithium company which could also benefit from the electric car adoption. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. With all of this in mind we're going to analyze the fresh hedge fund action surrounding Healthpeak Properties, Inc. (NYSE:PEAK).
Hedge fund activity in Healthpeak Properties, Inc. (NYSE:PEAK)
At the end of the second quarter, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -12% from the first quarter of 2020. On the other hand, there were a total of 26 hedge funds with a bullish position in PEAK a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
More specifically, Long Pond Capital was the largest shareholder of Healthpeak Properties, Inc. (NYSE:PEAK), with a stake worth $128.4 million reported as of the end of September. Trailing Long Pond Capital was Citadel Investment Group, which amassed a stake valued at $84.1 million. D E Shaw, Echo Street Capital Management, and Land & Buildings Investment Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Long Pond Capital allocated the biggest weight to Healthpeak Properties, Inc. (NYSE:PEAK), around 5.07% of its 13F portfolio. Land & Buildings Investment Management is also relatively very bullish on the stock, setting aside 4.35 percent of its 13F equity portfolio to PEAK.
Due to the fact that Healthpeak Properties, Inc. (NYSE:PEAK) has experienced falling interest from hedge fund managers, it's safe to say that there was a specific group of fund managers who were dropping their positions entirely last quarter. Interestingly, Stuart J. Zimmer's Zimmer Partners said goodbye to the largest stake of all the hedgies watched by Insider Monkey, totaling close to $93 million in stock, and J. Alan Reid, Jr.'s Forward Management was right behind this move, as the fund sold off about $5.9 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 3 funds last quarter.
Let's now take a look at hedge fund activity in other stocks similar to Healthpeak Properties, Inc. (NYSE:PEAK). These stocks are Tiffany & Co. (NYSE:TIF), Hologic, Inc. (NASDAQ:HOLX), BeiGene, Ltd. (NASDAQ:BGNE), CarMax Inc (NYSE:KMX), Broadridge Financial Solutions, Inc. (NYSE:BR), SS&C Technologies Holdings, Inc. (NASDAQ:SSNC), and Ryanair Holdings plc (NASDAQ:RYAAY). This group of stocks' market caps resemble PEAK's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TIF,64,2401546,-5 HOLX,46,1546938,5 BGNE,13,3356980,2 KMX,46,1420392,9 BR,24,193920,-5 SSNC,65,2274258,8 RYAAY,21,746925,-1 Average,39.9,1705851,1.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 39.9 hedge funds with bullish positions and the average amount invested in these stocks was $1706 million. That figure was $372 million in PEAK's case. SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) is the most popular stock in this table. On the other hand BeiGene, Ltd. (NASDAQ:BGNE) is the least popular one with only 13 bullish hedge fund positions. Healthpeak Properties, Inc. (NYSE:PEAK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PEAK is 35.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of September and surpassed the market by 19.3 percentage points. Unfortunately PEAK wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); PEAK investors were disappointed as the stock returned -0.2% in the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.